Households Willingness to Pay for Camel Milk in Aba'ala Woreda, Afar Regional State.

Although camel’s milk is known for its various economic and health benefits, unlike the live camel, there is no market for it in Aba'ala woreda. In this study, the researcher have attempted to investigate how much value the households can assign (willing to pay) for camel milk and the determinants of willingness to pay (WTP) for it using a Contingent Valuation Method. The CVM was based on face to face interview and the surveyed sample households were asked doublebounded dichotomous choice questions followed by open-ended questions to elicit their WTP for camel milk. Out of the total 250 sample households only 3 were not willing to purchase and the remaining 247 were willing to purchase. In this study, three econometric models; Tobit, Probit and Bivariate Probit models were employed. The result from the Tobit model revealed that households' income, age, remittance and the randomly offered bid positively affected households' maximum WTP for camel milk. On the other hand, age square affects households' maximum WTP for camel milk negatively. In the Probit model, the main determinants of the households' probability of accepting the randomly assigned bid are income, remittance, age, age square, the randomly offered bid, education of the household head and adult ratio. Income of the household, remittance, age of the household head and education level of the household head positively and significantly affects the probability of accepting the randomly offered bid by the sample households. On the other hand, age square, the randomly offered bid and adult ratio negatively and significantly affects the probability of saying "yes". In this study the Bivariate Probit model was employed to verify the statistical efficiency gain of the double-bounded over the singlebounded dichotomous choice model. Therefore, it is found that the double-bounded dichotomous choice model does not increase statistical efficiency over the single-bounded dichotomous choice model. Hence, we can employ the single-bounded dichotomous choice model instead of the double-bounded dichotomous choice model

The Economic Value of Camel Milk in Aba'ala Woreda, Afar Regional State, Ethiopia: A Contingent Valuation Study

Even if camel’s milk is known for its varied economic and health benefits, unlike the live camel, there is no market for it in Afar region in general and in Aba'ala woreda[1] in particular. In this study, the researcher has attempted to investigate how much  value the households can assign (willing to pay) for camel milk and the determinants of willingness to pay (WTP) for it using a Contingent Valuation Method (CVM). The CVM was based on face to face interview and the surveyed sample households were asked double-bounded dichotomous choice questions followed by an open-ended questions to elicit their WTP for camel milk. Out of the total 250 sample households 3 of them were not willing to purchase but the remainder 247 were willing to purchase camel milk had it been camel milk market in the woreda. In this study, three econometric models; Tobit, Probit and Bivariate Probit models were employed. The result from the Tobit model revealed that households' income, age, remittance and the randomly offered bid positively and significantly affects households' maximum WTP for camel milk. On the other hand, age square affects households' maximum WTP for camel milk negatively and significantly. In the Probit model, the main determinants of the households' probability of accepting the randomly offered bid are income, remittance, age, age square, the randomly offered bid, education level of the household head and adult ratio. Income of the household, remittance, age of the household head and education level of the household head positively and significantly affects the probability of accepting the randomly offered bid. On the other hand, age square, the randomly offered bid and adult ratio negatively and significantly affects the probability of saying "yes". In this study the Bivariate Probit model was employed to verify the statistical efficiency gain of the double-bounded over the single-bounded dichotomous choice model.  Therefore, it is found that the double-bounded dichotomous choice model does not increase statistical efficiency over the single-bounded dichotomous choice model. Hence, we can employ the single-bounded dichotomous choice model instead of the double-bounded dichotomous choice model. Moreover, the mean WTP for camel milk computed from the three models is almost equal. Key Words: Aba'ala, Afar, Bid, Bivariate Probit, Camel Milk, CVM, Double Bounded, Open ended, Probit, Single-Bounded, Tobit, WTP. [1] Is an administrative unit in Ethiopia, which is similar to Distric

Determinants of Household Saving in Gedeo Zone, Southern Ethiopia

This study examines the factors contributing for low rate of saving: the case of Gedeo zone. The study employed both descriptive and econometric method of data analysis. It employed censored regression model, that is, the Tobit model to investigate the main determinants of household saving in Gedeo zone. Accordingly, it is found that income, education, gender (being female), availability of financial institutions such as Banks and Microfinance institutions positively and significantly affects household saving. However, people in the early age and saving are negatively and significantly related. The study also found that other determinants of household saving like location of the household head (Households reside in the rural area) and household size  negatively and significantly affects household saving. That is, households reside in the urban area save more than households reside in the rural area and as household size  increase household saving changes in the opposite direction. Keywords: Age, education, female, Gedeo zone, gender, household, household saving, household size, income, model, rural, tobit, urban

Markets and human behavior:evidence from artefactual field experiments

There hardly exists a central concept as markets in the economics discipline. Markets are associated with the efficient allocation of scarce resources and are the fundamental drivers of material well-being. However, markets are not only economic but also social institutions where people meet and commune with each other, and these interactions in the market commonly extend to economic and non-economic (social) relationships. The main objective of this dissertation is, thus, to enhance our understanding of whether and how markets shape human behaviour. Specifically, this dissertation investigates the effect of markets on socially responsible behaviour, social capital, and investment decisions. The findings show that markets have both intended and unintended effects on human behaviour. The dissertation highlights the policy options on how markets could bring about the desired behavioural changes

The effect of weather index insurance on social capital: Experimental evidence from Ethiopia

In this study, using data from lab-in-the-field experiment, we explore whether the introduction of weather index insurance crowds in or crowds out social capital in northern Ethiopia. We use contributions in the public good game as a measure of social capital. We find that weather index insurance crowds out social capital. The free-riding problem created by the positive externality of weather index insurance and development of self-sufficiency behaviour are found to be the causal mechanisms behind the crowding out phenomenon. Our results indicate that formal insurance mechanisms do not occur in a vacuum and may have unintended effects. Hence, this study suggests that novel insurance product design and marketing strategies should be used to ameliorate such unintended effects